2023 Review & 2024 Forecast: OC Real Estate Marketplace Update
OC Real Estate Marketplace Update: 2022 Review and 2023 Forecast|| Michael Hausam
Every 2 weeks I do a general overview of the OC real estate market - but once a year I do a review of the previous year (including evaluation of that year's forecasts that I made) and a forecast for the upcoming year.
Summary:
Marketplace Update for the last 2 weeks:
Interest rates continued their decline: 6.61% That's 1.18% below the year's high in October and haven't been this low since late May. It's still 1/2% above the year's low in February.
Inventory dropped again
2024 will begin with about 1,700 homes available for sale, 26% less than last year and the 2nd lowest since tracking began 19 years ago. Only 2022 started with fewer homes.
Demand dropped again - 10% month over month.
Sales numbers for this time of year are the lowest since tracking began 19 years ago.
Expected market time dropped to 53 days - still a hot seller market and down a lot from last year's 76 days.
2023 Review
Forecast #1: Low inventory with a peak quantity of 5,500 in August. Actual results: Peak of 2,496 homes 39% less than 2023.
Forecast #2: muted demand and 6.5% to 8.5% depreciation for the year. Actual results: Demand was consistent and prices rose.
Forecast #3: Normal cycle: highest sales in Spring, highest inventory in summer, slowing of sales in the Fall into Winter. Actual results: Peak inventory didn't hit until early November.
Forecast #4: 3% - 6% to 8% decrease in total countywide sales to 22,900. Actual results: 19% drop in sales to 19,700. And a 44% drop from 2021 sales numbers.e
Forecast #5: Rate drop to year's end to 5% to 5.5%. Actual results: Rates increased - the low for the year was in the low 6%s in February, hit a high of 7.79% in October, and settled out the year at 6.61%.
2024 Forecast
Forecast #1: Rates in the mid to high 6%s and then dropping in to the high 5%s. The quicker the economy cools and inflation slows, the quicker this will happen.
Forecast #2: Increased inventory compared to 2022, with a peak in the summer of 3,000 to 3,500 (still very low by historical standards)
Forecast #3: Demand will be subject to rates, but generally strong; the quicker the drop, the higher will be demand. 3% to 5% appreciation.
Forecast #4: Normal cycle - peak sales in the spring and peak inventory in the summer.
Forecast #5: Sales will be up 10% to 15% for the year - 21,000 to 23,000 total transactions.
Michael Hausam is a licensed Real Estate Broker (BRE Agent #1319560) and Mortgage Loan Originator (NMLS # 1577195). He's been a resident of Orange County, CA since 1990, he funded his first mortgage loan in 1991, has had a B-1 general contractors license since 2005, and he has had his real estate license for over 22 years.
Thank you,
Michael Hausam
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